Ericsson’s perspective on the net neutrality debate

INTRODUCTION
Keeping the internet open for innovation is critical to ensuring
continued investment in all parts of the internet broadband
value chain. At Ericsson, we believe that broadband
providers, device manufacturers, consumers, enterprises
and content providers will benefit when the internet is
open to experimentation, differentiation and innovation.
With that in mind, we offer the following thoughts, backed up
by real-world scenarios and technological realities. This report
aims to help guide policy makers as they grapple with the often
competing demands of various players in the internet value chain.
Executive summary
Ericsson’s views regarding net
neutrality and the open internet.
Authors
Jared Carlson
Director, Ericsson Government
and Industry Relations
Walter van der Weiden
Director of European Affairs,
Ericsson Government and
Industry Relations
An open internet
We support the open internet and
consumers’ right to access legal
content – that is, an internet which
allows and encourages innovation,
investment, and customization
An informed choice
Consumers should have access to the
information needed to make an informed
choice on their level of service
Quality of Service
We support operators employing
Quality of Service (QoS) and robust
network management tools
OUR
BELIEFS
Allow innovation
A realistic, effective and efficient way
to handle the open internet is to apply
principled and reasonable rules to mass
market broadband internet access,
leaving other forms of communication
largely unregulated. Instead of trying
to define rules that will not be futureproof and will eventually be detrimental
to innovation and the user, allow for
experimentation and innovation that
will create many societal benefits
2 KEEPING THE INTERNET OPEN FOR INNOVATION JUNE 2015
All bits are not equal
Treating all bits equally – the
definition of net neutrality – is not
a desired outcome. Consumers,
content and service providers,
and network providers all benefit
from the possibilities created by
differentiation and customization
Meeting customer concerns
When competition alone does not achieve
the level of openness that consumers
demand, policy makers must determine
whether they should intervene. It is
their role to ensure that mass market
consumers’ access is protected

Ericsson’s position
We support the availability of an open, unrestricted,
and accessible internet experience for all users.
Connectivity
The key ingredient for building
the Networked Society
An environment where consumers can
decide what levels of access best suit their
needs is superior to government-dictated
requirements, which may prohibit offers of
anything other than best-effort internet access.
managing
networks
flexibly
In order to serve their customers, operators
must find economically viable options for
deploying broadband infrastructure and
providing social value, all while maintaining
their competitiveness. This requires the most
efficient possible use of their resources, as
well as maximizing the value they provide to
customers, and maintaining the rewards of
service innovation.
Finally, we support an environment in which
providers of broadband content, services and
applications benefit from the ability to offer
differentiated user experiences.
Here at Ericsson, we believe that the internet
should allow and encourage:
INNOVATION
INVESTMENT
CUSTOMIZATION
CHOICE
LEVELS OF ACCESS
In short, Ericsson supports an open internet.
KEEPING THE INTERNET OPEN FOR INNOVATION JUNE 2015 3

WHAT’S THE
PROBLEM?
There is a consensus, particularly in the US and
Europe, that consumers demand an open internet.
A competitive marketplace virtually ensures openness:
consumers can ‘vote with their feet’ if one provider’s
policies restrict or degrade access to the content,
services or applications that they want.
A few short-lived and commercially unsuccessful
attempts in the US and Europe to thwart access
to certain services have failed, not because of
government intervention, but due to a well-functioning
market. Under pressure from consumers, competitive
providers have no choice but to offer an open internet.
We believe that policies supporting increased
competition – and, if needed, measures aimed at
ensuring fair competition practices – should be the
chief means of guaranteeing an open internet.
The more information
that is made available,
the better the consumer
can tailor services to
his or her preferences
open internet
Policies supporting increased
competition should be the chief means
of guaranteeing an open internet
We agree that customers should get what they pay for.
Disclosures to consumers about the nature and quality
of their access are an important part of customer
choice. The more information that is made available,
the better the consumer can tailor services to his or
her preferences.
Busy
marketplace
Information
and access
Under pressure from
consumers, competitive
providers have no choice
but to offer an open internet
Consumers
Disclosing to consumers the
nature and quality of their
access is an important part
of customer choice
4 KEEPING THE INTERNET OPEN FOR INNOVATION JUNE 2015

HINDERING
INNOVATION
Overly restrictive net neutrality
regulation discourages internet
innovators from taking chances
In markets with less competition,
governments may need to exercise
regulatory pressure to enforce
requirements that will guarantee
open internet access. However,
the notion that all data bits must
be treated equally – a concept
that underpins net neutrality
regulation – is a heavy-handed
and misguided response to
concerns about openness.
Not only does overly restrictive net
neutrality regulation add costs to
doing business, it also discourages
internet innovators from taking
chances, and reduces much
needed network investments.
Rather than risk time or money
developing bold new services –
that may be determined to have
crossed the line by treating one
bit as higher or lower priority than
another bit – innovators may simply
choose to keep their inventions
in the garage. Additionally, the
tools that operators use today to
manage networks for the benefit
of all users are called into question
by strict net neutrality regulations.
MISGUIDED
response
The notion that all data
bits must be treated equally
is a heavy-handed and
misguided reaction to
concerns about openness
KEEPING THE INTERNET OPEN FOR INNOVATION JUNE 2015 5

Policy makers AND
NETWORK MANAGEMENT
An open internet must permit operators to offer
differentiated QoS to customers and content and
application providers. That is, it must support
offerings outside of the public internet, such as IPTV
and operator-provided IP voice services, including
VoLTE and VoIP, and the emerging world of
connected devices – all commonly referred to
as specialized services.1
An open internet regime must be capable of delivering
guaranteed QoS to sectors including health, public
safety, enterprise and utilities.2
HEALTH
PUBLIC
SAFETY
ENTERPRISE
UTILITIES
User demands and the related need for network
investment increasingly necessitates offering managed
services. Building, maintaining and updating wireless,
cable and fiber networks to keep up with consumer
demand is a massive capital endeavor. In addition,
network management is crucial to ensuring that all
customers are given an acceptable internet experience
in cases where there is competition for limited
network resources. This is particularly important
for wireless broadband data, where dynamically
changing conditions (for example, a subway train full
of passengers all moving from one cell to another) and
limited resources (radio spectrum) demand the active
management of networks.
We ask that policy makers focus on the problem
needing to be solved, and stress that treating every bit
equally is not necessary, or even desirable, to ensure
an open internet.
network
management
It is crucial to ensure that
consumers get an acceptable
internet experience
1
C
onnected devices may use parts of or the full internet Protocol stack for their functionality, traveling wholly on networks logically separated from the public
internet. A logical separation does not mean that it does not touch the public internet, as the same physical resources may be used.
2
N
ote that these and other examples could be offered with a higher QoS than other content on the public internet, or offered as specialized services.
6 KEEPING THE INTERNET OPEN FOR INNOVATION JUNE 2015

If the market for internet access is failing, perhaps due to a lack
of competition, we make the following recommendations:
Establish general requirements for broadband providers to give their
customers access to lawful internet content, applications and services
Permit QoS distinctions for specialized services: for connected devices and
enterprise services (for example, internet access for public safety, business
and other non-mass market customers), or where requested by the customer
QoS differentiation should therefore be permitted in two different ways: as a result
of providing a specialized service, or as a user-requested feature in the provision
of a public internet access service3
Allow for robust traffic management tools. As long as traffic management
is applied in a manner that does not harm consumers or competition,
it should be permitted
Specialized services
In addition to best effort or broadband internet access
services, providers should be able to make use of
network capacity to deliver content, applications
and services that require an enhanced QoS, but
are distinct from the internet access service.
We ask that policy makers permit different QoS
for traffic that might cover the same facilities as
broadband internet services. As long as customers
get what they pay for in terms of broadband
internet access, operators should generally be
free to offer specialized services as well.
IPTV provided by the operator, for example,
may use IP as the communications protocol,
but the service is distinct from broadband internet
access. A higher QoS for IPTV is critical, as
consumers demand low latency and will not
tolerate jitters or freezing when watching television.
3
Similarly, voice provided over a mobile network is also
treated as a specialized service. Consumers demand
that voice services – the foundation of mobile networks
from their inception – do not have delays or cut-outs.
Therefore, mobile networks are engineered to treat
voice with a higher QoS than other forms of traffic.
different qos
Policy makers should permit different
QoS for traffic that covers the same
facilities as broadband internet services
A
user request for QoS could take multiple forms. In an environment with numerous competitors, the request might be signing up with a provider that offers
the quality enhancements desired by a consumer. Customers could also elect QoS by paying the operator to prioritize some traffic over others. If a customer
desires a higher QoS for content that they visit every day, and is willing to pay for that content, we believe the operator should be free to offer it.
KEEPING THE INTERNET OPEN FOR INNOVATION JUNE 2015 7

The vastly different needs of sensors and machines
characterize machine communication.
HIGH PRIORITY
Communications among vehicles for
crash avoidance or navigation
LOW PRIORITY
A 30 minute update on residential
electricity usage
Ensuring Quality of Service
Notions of fair access and
unhampered freedom of
expression are part of the
net neutrality debate when
discussing people, but have
no place when dealing with
connected devices and machine
communications. Rather, it is the
vastly different needs of sensors
and machines, and the networks
and applications to support
those needs, that characterize
machine communication.
In a scenario where all bits are
treated equally and there is a
negligible penalty for inefficient
delivery, a service or application
provider could, for example, use
repetitive codes, i.e. sending the
same message several times,
to ensure QoS. The theory here
is that by being persistent you
get better service. This uses a
large amount of bandwidth and
network resources, hampering the
experience of others sharing the
same network. It is an unfortunate
behavior that has come about as a
direct result of all bits being treated
equally. Alternatively, the use of
innovative compression, coding
and QoS mechanisms would help
to ensure both reasonable and fair
network and bandwidth allocation.
A question of priority
Communications among vehicles
for crash avoidance or navigation
are more urgent than a 30 minute
update on residential electricity
usage. The notion that every
data bit sent between connected
cars should be treated with the
same degree of priority as those
8 KEEPING THE INTERNET OPEN FOR INNOVATION JUNE 2015
transmitted from a smart electric
meter back to the electricity
supply company ignores the
difference in requirements of the
machines that will increasingly
connect to the wireless internet.
This example illustrates the
futility of attempting to apply
a regime in which prioritization,
or even de-prioritization of data
is prohibited, and we know that
future services will only become
more complex over time.
Rules treating all data equally
would either over-provision
resources for devices that do not
require real-time communications
or could endanger critical uses, like
self-driving automobiles, by failing
to prioritize their communications
over others.

ROBUST NETWORK
MANAGEMENT TOOLS
Traffic management ensures that the day-to-day
delivery of broadband internet access can be
maintained. Regulation should make it clear that
non-discrimination does not prevent operators
from treating different types of traffic differently in
accordance with their technical requirements.
Operators need to be able to employ network
management tools. For example, in a purely
technical way, consider the differences in signal
strength based on users’ locations from a mobile
network base station. As users move further
away from the base station and closer to the cell
edge, they may experience as much as a 60 dB
(1,000,000 times) difference in signal strength.
This vast difference in signal strength makes the
achievable speeds vary wildly for different users.
the impact that proximity to the cell center can have on
applications, showing the bandwidths that deliver high
quality video, music and text or email experiences.
Theoretically, a network could provide every
device served by a particular base station with
the same degraded quality experienced by those
at the cell edge. Doing so would ensure that
most users receive worse service, and the total
capacity of the site would be significantly lowered.
We see little value in using network management
to guarantee only a baseline of service.
speed variation
Despite this engineering reality, it seems that some of
the most vocal supporters of applying a net neutrality
regime to mobile broadband support the impractical
concept that modern wireless networks – which
currently adhere to the basic principle of delivering
all bits as fast as the radio channel conditions allow –
should instead dictate that every user’s experience be
equal to those experiencing poor signal propagation.
Vast differences in signal strength
mean that service speed can vary
greatly among different users
This concept is key to understanding the network
management decisions an operator faces every day
across its entire network. The graphic below illustrates
This is just one example of a network management
concept in use today. Rather than prohibit certain tools
and limit their use, we ask policy makers to continue
allowing operators to make use of network management
tools to improve everyone’s broadband experience.
App coverage
10
Mbps
1
Mbps
0.1
Mbps
Source: Ericsson 2013
KEEPING THE INTERNET OPEN FOR INNOVATION JUNE 2015 9

CONCLUSION
open
internet
We support an
internet that allows
and encourages
innovation, investment
and customization
Every internet user is unique
in what they value, in terms of
content, the price they are willing
to pay for the delivery of that
content, and what QoS level they
would prefer that content to be
delivered on. Consumers should
have access to the information
needed to make informed choices.
When competition is lacking,
policy makers may have an
important role to play in terms
of ensuring that mass market
consumers have access to the
legal content, applications and
services that they desire. We
support that ideal and believe
operators should be permitted to
employ QoS and robust network
management tools. Policy makers,
however, should refrain from
prescriptive technical language
that will not be future-proof and
eventually become detrimental
to innovation and the consumer.
Rules where reasonable
A more realistic, effective and efficient way to handle the
open internet is to apply principled and reasonable rules
to mass market broadband internet access and leave
other forms of communication largely unregulated.
As the discussion throughout
implies, a different route
should be adopted, rather
than carving out specialized
services, connected devices,
business offerings and so forth.
Instead of defining the exceptions
to the rule, simply define the
service at issue, and allow
for the experimentation and
innovation that has led to so
many societal benefits.
KEEPING THE INTERNET OPEN FOR INNOVATION JUNE 2015 11